Inventory and Warehouse Management January 6, 7, 8, 2009 LaGov · 2019-02-22 · 1/21/2009 4 Purpose of Validation Sessions Validation Sessions are intended to provide feedback to

Version 2.2Updated: 12/17/08

Inventory and Warehouse ManagementValidation Session

LOG-IM/WM-ValidationJanuary 6, 7, 8, 2009

Inventory and Warehouse ManagementInventory and Warehouse ManagementValidation SessionValidation Session

LOGLOG--IM/WMIM/WM--ValidationValidationJanuary 6, 7, 8, 2009January 6, 7, 8, 2009

LaGovLaGov

1/21/2009 2

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IM / WM Validation Session AgendaIM / WM Validation Session Agenda

Purpose

Work Session Recap

Master Data Design

Key Design Elements and Decisions

Changes and Challenges

Open Issues

Benefits/Improvements

FRICE-W objects

To-Be Processes by Topic

Key Design Elements and Decisions

Changes and Challenges

Open Issues

Benefits/Improvements

FRICE-W objects

Conversion Strategy and Interim Solution

Organizational Impacts

Next Steps

Questions

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Purpose of Validation SessionsPurpose of Validation Sessions

Validation Sessions are intended to provide feedback to the workshop participants regarding the TO-BE process design:

Review and discuss TO-BE business process design.• Confirm adherence to Leading Practices inherent in SAP or reasons for differing.• Ensure the State’s business requirements have been addressed.• Highlight decisions that define the process, approval steps, and integration

points.

Review and discuss Master Data design.• Address key integration points.• Support organizational requirements.• Consistent and appropriate use of data fields.

Identify areas of changing processes, roles, and responsibilities.

Resolve open issues or identify strategies for resolution.

Analyze and document the benefits, improvements, and challenges inherent in the TO-BE process design.

Note: Validation sessions are an affirmation of work session decisions, and assumes the SAP functionality knowledge covered in the TO-BE session.

Note: Validation sessions are an affirmation of work session decisions, and assumes the SAP functionality knowledge covered in the TO-BE session.

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Purpose of TodayPurpose of Today’’s Validation Sessions Validation Session

Review Inventory and Warehouse Management organizational structure.

Define Material Master Data specific to Inventory and Warehouse Management processes.– General data– MRP specific data– Warehouse Management specific data

Review process flows for goods movements.– Goods Receipts– Goods Issues– Stock Transfers

Review process flow for M(aterials) R(equirements) P(lanning).

Review Warehouse Management planning and monitoring tools.

Review stock taking processes.

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IM / WM Workshop Session RecapIM / WM Workshop Session Recap

Business Process

Workshop Codes Goals

Work Session

Date

AM/PM

WM SpecificMaterial Master

LOG-MD-005

Define differences between Warehouse Management and Inventory Management Review Warehouse Management structure Define key Warehouse Management material master data

9/23-24/08 8:30am- 4:30pm

MRP Specific Material Master

LOG-MD-004

Overview of general inventory replenishment and MRP concepts Define key MRP material master data Review MRP functionality and control data Review forecast functionality Determine forecast applicability based on consumption history

10/7/08 8:30am- 4:30pm

Inventory and Warehouse

Goods Movement

LOG-IM/WM-002

Review goods receipt processes Review transfer options between storage locations and plants Review goods issue processes Review scrapping process Review transfer process for material status changes Review control data for account determination in Inventory

Management

10/15/08 8:30am- 4:30pm

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IM / WM Workshop Session RecapIM / WM Workshop Session Recap

Business Process

Workshop Codes Goals

Work Session

Date

AM/PM

Inventory and Warehouse

Stock Taking

LOG- IM/WM-003 Review physical inventory processes 10/16/08 8:30am-

4:30pm

Warehouse Management Planning and

Monitoring

LOG-WM-001

Review process for monitoring transfer requirements Review inbound and outbound delivery monitors Review process for generating a pick list for items in multiple

locations Review process for combining multiple storage units into a single

storage unit

10/29/08 8:30am- 4:30pm

MRP Planning Run

LOG-IM-001

Define MRP execution control parameters Review and live demo of MRP execution process Review and live demo of MRP evaluation and output processing Live demo of purchase order cycle Live demo of stock transport order cycle Live demo of reservations and issues for consumption

11/5/08 8:30am- 4:30pm

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Organizational Structure Organizational Structure

Inventory and Warehouse ManagementOrganizational Structure

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IM / WM Organizational StructureIM / WM Organizational Structure

Plant:– Is an operational unit within a single Company Code. – Is embedded in the organizational structure as follows:

• A Company Code can have several plants.

• Several Storage Locations in which materials (stock) are managed belong to a Plant.

• A Plant can have both Inventory Management and Warehouse Management.

• The valuation of inventory is instrumental in the determination of Plants within an organizational structure.

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Storage Location:– Is an organizational unit allowing a physical delivery location, as

well as the differentiation of material stocks within a Plant. – Is where stocks of materials are delivered and where inventory

exists.

MRP Areas:– Will be utilized to subdivide Plants into individual replenishment

units.– Materials managed in MRP Areas will have both a Plant and

MRP Area control data.

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Inventory and Warehouse ManagementInventory and Warehouse Management Proposed Organizational ChartProposed Organizational Chart

MRP AREA 1

DPS

PLANT

PLANT

DATA

RADIO MAINTANANCE

CENTRAL WAREHOUSE

POLICE SUPPLY

CRIME LAB

HQ FLEET

IM

IM

IM

IM

IM

WM

WAREHOUSE

INVENTORY MANAGEMENT

PLANT MRP

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Inventory and Warehouse ManagementInventory and Warehouse Management Proposed Organizational ChartProposed Organizational Chart

PLANT LEVEL MRP

DOTD

CENTRAL

WAREHOUSE TRAFFIC

DISTRICT 9

MRP AREA 1SECTION 7

ADDR

CENTRAL

WHS

YARD

STORAGE LOCATION

PLANT

WAREHOUSE

STORAGE LOCATION

MRP AREA 1

PARISH 2

MRP AREA 2

PARISH 3

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Inventory and Warehouse ManagementInventory and Warehouse Management Organizational ChartOrganizational Chart

DPS – Department of Public SafetyDPS – Department of Public Safety

Department of Department of Public SafetyPublic Safety

XXXXXXXXXXXX

Purchasing OrganizationPurchasing OrganizationPurchasing Organization

Purchasing GroupPurchasing GroupPurchasing Group

PlantPlant

Storage LocationStorage Location

I MI M

WHWH

Office of StateOffice of StatePurchasingPurchasing

XXXXXXXXXXXX

Procurement Services (Central WH)Baton Rouge, LA

Procurement Services (Central WH)Baton Rouge, LA

Management & Finance

XXXXXXXXX

418418

Information Services (HQ)Baton Rouge, LA

Information Services (HQ)Baton Rouge, LA

Radio MaintenanceBaton Rouge, LA

Radio MaintenanceBaton Rouge, LA

PlantPlant

Other Delivery Location(s)<City>, LA

Other Delivery Location(s)<City>, LAOther Delivery Location(s)

<City>, LAOther Delivery Location(s)

<City>, LAOther Delivery Location(s)<City>, LA

Other Delivery Location(s)<City>, LA

Location 1 (HQ)<City>, LA

Location 1 (HQ)<City>, LA

Motor Vehicles

XXXXXXXXX

420420

PlantPlant

Location 2-82<City>, LA

Location 2-82<City>, LALocation 2-82

<City>, LALocation 2-82

<City>, LALocation 2-82<City>, LA

Location 2-82<City>, LA

I MI M

I MI M

WHWH

Inventory

Warehouse

Police Supply (HQ)Baton Rouge, LA

Police Supply (HQ)Baton Rouge, LA

State Police

XXXXXXXXX

419419

Fleet HQBaton Rouge, LA

Fleet HQBaton Rouge, LA

Crime Lab/DNABaton Rouge, LACrime Lab/DNABaton Rouge, LA

Crime Lab/CriminalBaton Rouge, LA

Crime Lab/CriminalBaton Rouge, LA

PlantPlant

Photo LabBaton Rouge, LA

Photo LabBaton Rouge, LA

Troop A HQ (Fleet SR)<City>, LA

Troop A HQ (Fleet SR)<City>, LA

Troop B HQ (Fleet SR)<City>, LA

Troop B HQ (Fleet SR)<City>, LA

Troop C HQ (Fleet SR)<City>, LA

Troop C HQ (Fleet SR)<City>, LA

Troop D HQ (Fleet SR)<City>, LA

Troop D HQ (Fleet SR)<City>, LA

Troop E/Region 2 HQ (Fleet SR)<City>, LA

Troop E/Region 2 HQ (Fleet SR)<City>, LA

Troop F HQ (Fleet SR)<City>, LA

Troop F HQ (Fleet SR)<City>, LA

Troop G HQ (Fleet SR)<City>, LA

Troop G HQ (Fleet SR)<City>, LA

Troop I HQ (Fleet SR)<City>, LA

Troop I HQ (Fleet SR)<City>, LA

Troop L HQ (Fleet SR)<City>, LA

Troop L HQ (Fleet SR)<City>, LA

I MI MI MI M

I MI MI MI M

I MI M

I MI M I MI M

I MI MI MI M

I MI MI MI M

I MI MI MI M

I MI M

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Section 76<City>, LA



DOTD – Department of Trans. & Dev.DOTD – Department of Trans. & Dev.Department of Department of

Transportation &Transportation &DevelopmentDevelopment

XXXXXXXXXXXXOffice of StateOffice of StatePurchasingPurchasing

XXXXXXXXXXXX

Administration273273

Multiple Sections<City>, LA






District 1<City>, LADistrict 1<City>, LA

Engineering & Operations

XXXXXXXXX

276276


XXXXXXXXX


XXXXXXXXX


XXXXXXXXX


XXXXXXXXX


XXXXXXXXX


XXXXXXXXX


XXXXXXXXX


XXXXXXXXX



XXXXXXXXX

Section 45/32 – Traffic (Big WH)<City>, LA

Section 45/32 – Traffic (Big WH)<City>, LA

XXXXXXXXX


Section 20<City>, LAXXXXXXXXX



XXXXXXXXX



XXXXXXXXX



XXXXXXXXX



XXXXXXXXX

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

PlantPlant

Section 1<City>, LASection 1<City>, LA

Public Works/Flood/Intermodal

XXXXXXXXX

Section 2 (?)<City>, LA

Section 2 (?)<City>, LAXXXXXXXXX



XXXXXXXXX

275275

PlantPlant

Sabine/Red River Authority813813

PlantPlant XXXXXXXXXXXX

XXXXXXXXX



PlantPlant


I MI M

WHWH

Inventory

Warehouse

WHWH

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

I MI M

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LDWF – Department of Wildlife & FisheriesLDWF – Department of Wildlife & Fisheries

Department of Department of Wildlife andWildlife and

FisheriesFisheries

XXXXXXXXXXXX

Office of the UndersecretaryBaton Rouge, LA

Office of the UndersecretaryBaton Rouge, LA

Mgmt & Finance

Office of StateOffice of StatePurchasingPurchasing

XXXXXXXXXXXX

Region 3<City>, LARegion 3<City>, LA

Office of the Secretary (HQ)Baton Rouge, LA

Office of the Secretary (HQ)Baton Rouge, LA

EnforcementBaton Rouge, LAEnforcement

Baton Rouge, LA

Secretary

XXXXXXXXX

Seafood MarketingBaton Rouge, LA

Seafood MarketingBaton Rouge, LA

Office of the Assistant SecretaryBaton Rouge, LA

Office of the Assistant SecretaryBaton Rouge, LA

Facilities<City>, LAFacilities<City>, LA

Wildlife

XXXXXXXXX

Office of the Asst. SecretaryBaton Rouge, LA

Office of the Asst. SecretaryBaton Rouge, LA

Inland <City>, LAInland

<City>, LA

Fisheries

XXXXXXXXX

XXXXXXXXX

Rockefeller Wildlife RefugeGrand Chenier, LA

Rockefeller Wildlife RefugeGrand Chenier, LA

XXXXXXXXX

Region 1 - 9<City>, LA

Region 1 - 9<City>, LA

Human resourcesBaton Rouge, LA

Human resourcesBaton Rouge, LA

XXXXXXXXX

512512 511511 513513 514514

Administration<City>, LA

Administration<City>, LA XXXXXXXXX

Environmental Education<City>, LA

Environmental Education<City>, LA

XXXXXXXXX

Wildlife<City>, LAWildlife

<City>, LAXXXXXXXXX

Coastal & Non-Game Resources<City>, LA

Coastal & Non-Game Resources<City>, LA

XXXXXXXXX

FinanceBaton Rouge, LA

FinanceBaton Rouge, LA

XXXXXXXXXAdministration

<City>, LAAdministration

<City>, LA XXXXXXXXX

Marine<City>, LAMarine

<City>, LAXXXXXXXXX

Fish Research & Assessment<City>, LA

Fish Research & Assessment<City>, LA

XXXXXXXXX

XXXXXXXXX

XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX



PlantPlant


I MI M

WHWH

I MI M

I MI M

I MI M

I MI M

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Inventory Management oversees the aggregate inventory position and item status.

min/maxquantitypriceunit of measureMRP functionality

Warehouse Management is used to manage complex warehouse structures.

Management of items at bin levelWarehouse Management is not possible without

Inventory Management

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IM / WM Organizational StructureIM / WM Organizational Structure Key DecisionsKey Decisions

Phase one of LaGov project:

– Identified 2 Warehouses within the State of Louisiana:

DOTD Central Warehouse

DPS Central Warehouse

– Identified multiple Storage Locations with Inventory Management functions only. For example:

DOTD Sections

DOTD Parishes

DPS Police Supply

DPS Crime Lab

DPS Fleet HQ

DPS Troops (vehicle repair shops)

– Determined use of MRP Areas. For example:

DOTD Parish 1 – MRP Area 1

DOTD Parish 2 – MRP Area 2

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Change: Establishment of MRP Areas within Plant structure

– Organizational impacts:• Ability to have MRP generated replenishment proposals for

local inventories, such as parishes, managed by one MRP Controller

• Reduction of workload required to manage inventory at a stock location

– Training requirements:• Educating MRP Controller on inventory functions related to

MRP Area

IM / WM Organizational StructureIM / WM Organizational Structure Changes & ChallengesChanges & Challenges

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IM / WM Organizational StructureIM / WM Organizational Structure Resolved IssuesResolved Issues

Determination of Wildlife & Fisheries’ organizational structure in relation to Inventory and Warehouse Management.

– Wildlife & Fisheries will have four Plants and will utilize Inventory Management only.

Final determination of DOTD’s organizational structure.

– DOTD’s organizational structure has been defined.

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IM / WM Organizational StructureIM / WM Organizational Structure Open IssuesOpen Issues

Define with Logistics the numbering scheme for Storage Locations and Plants.

Discuss with PM and Agile Assets regarding Storage Locations and numbering – will Storage Locations be the same within both?

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IM / WM Organizational StructureIM / WM Organizational Structure Benefits & ImprovementsBenefits & Improvements

Establishment of MRP Areas can improve management of inventory at multiple locations. For example:

– DOTD districts will be able to view parish inventories to make better informed decisions regarding replenishment of stock.

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Material Master DataMaterial Master Data

Material Master Record

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Material Master Data Material Master Data -- GeneralGeneral

Material Master Record:

– Is a data record containing all of the basic information required to manage a material in SAP.

– Creation of the record for non-inventoried materials requires the following views:

Basic Data 1 & 2 Purchasing Purchase Order Text Accounting 1 & 2

– Contains both global and plant specific information.

– Global information is shared across the ERP system and is maintained by a centralized work group.

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Material Master Data Material Master Data –– GeneralGeneral Key DecisionsKey Decisions

Internal numbering will be used for material numbers.

UNSPSC codes will replace current commodity codes.

Noun nomenclature will be used for short text fields.

Multiple units of measure will be utilized.

Open security so that agencies can view (not update) data within another plant.

All new Material Master Records will be created by a centralized work group.

Changes to global fields of the Material Master Record will be maintained by a centralized work group.

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Material Master Data Material Master Data –– GeneralGeneral Create Material Master RecordCreate Material Master Record

Cen

tral G

roup

Req

uest

er

1/21/2009 26

Material Master Data Material Master Data –– GeneralGeneral Changes & ChallengesChanges & Challenges

CHANGE: Centralized work group to be owners/maintainers of global information pertaining to the Material Master Records and inventory staff will maintain localized master data.

– Organizational impacts:• Material Master Number Request forms will be completed by the requestor and

sent to the centralized work group.• The centralized work group will create new Material Master Records and extend

appropriate IM & WM views.

– Policy impacts:• Policy and procedures will need to be established for completion of information

sent to the centralized work group for additions, changes and deletions of Material Master Records.

• Develop a policy and procedure for the maintenance of Material Master Records at the localized level.

– Training requirements:• Personnel to complete required form for additions, changes or deletions of

Material Master Records. • Maintainers must know the master data well and have the knowledge of which

areas the master data impacts.

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Material Master Data Material Master Data –– GeneralGeneral Changes & ChallengesChanges & Challenges

CHANGE: Internal numbering of Material Master Records

– Organizational impacts:• Replacement of current stock numbering system

– Training requirements:• Online search by selection criteria of Material

Master Records (Description, Material Group, Plant, Material Type, etc.)

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Material Master Data Material Master Data –– GeneralGeneral Open IssuesOpen Issues

Develop a list of Material Types (classification of materials)

– Examples of Material Types

Office SuppliesJanitorial SuppliesAutomotive Parts Safety Supplies

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Material Master Data Material Master Data –– GeneralGeneral Benefits & ImprovementsBenefits & Improvements

Material Master Record to contain uniform descriptive information shared across the ERP system.

Will have the ability to view and manage a stocked item statewide by an identified Material Master Number.

The master data process/maintenance will provide better notification of changes throughout the supply chain.

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Material Master Data Material Master Data –– GeneralGeneral FRICEFRICE--W ObjectsW Objects

Forms:– Material Create / Change form (PDF form sent

electronically to the centralized work group).

Conversions:– Conversion strategy needed for material masters,

inventory, bins, etc.– Current systems to be converted:

• PIMS• Venice• Wildlife & Fisheries ?

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Material Master Data Material Master Data

Inventory SpecificMaterial Master Data

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Material Master DataMaterial Master Data Inventory Management OnlyInventory Management Only

The centralized work group will extend the Material Master Record to specific Storage Locations that are utilizing Inventory Management.

The extension of the Material Master Record will result in the addition of the following views:

Plant data/Storage Location data 1 & 2Plant Stock (display only) Storage Location Stock (display only)

These views contain both defaulted global and Plant specific information.

Only Plant specific information may be modified by inventory staff.

Financial information is tied to the Plant level material master data.

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Material Master Data Material Master Data -- Inventory Management OnlyInventory Management Only Key DecisionsKey Decisions

Decision needs to be made on the ability to valuate inventory differently across the parishes/state. Per DOTD, a weighted average price for each district would be acceptable.

– Each DOTD district will have the same weighted average price. For example:

• The cost of gravel will be the same at both the district level and any parishes within this district.

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Material Master Data Material Master Data

MRP SpecificMaterial Master Data

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Material Master Data Material Master Data –– MRP SpecificMRP Specific

Materials Requirement Planning (MRP) will be used to create replenishment proposals for inventoried materials at the Plant / MRP Area level.

Material Master MRP views will be extended by the centralized work group to Plant/Storage Locations that will utilize MRP functionality.


MRP 1, 2, 3 & 4

Forecasting

Multiple inventory locations can be grouped as one MRP Area managed by one MRP Controller on the MRP Area views.

MRP specific information will be managed by inventory staff, usually the MRP Controller.

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Material Master Data Material Master Data –– MRP specificMRP specific

Consumption driven MRP will only be activated after sufficient consumption history has been generated in the system. It will then be based on manual reorder point and safety stock.

The statistical forecast and automatic reorder point and safety stock determination option will be available once an appropriate consumption history has been generated where:

– The material has a non-sporadic consumption history.– A realistic replenishment lead time and service level can be defined.

If a new material is added to the MRP, and the warehouse determines that the material is relevant for statistical forecast, the following options are available:

– Assign an existing material with similar consumption values as reference.– Let the material build up consumption statistics over at least 3 months and then

initialize the forecast.

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Material Master Data Material Master Data –– MRP SpecificMRP Specific Key DecisionsKey Decisions

LaGov project will utilize MRP functionality.

MRP Areas, with assigned Storage Locations, will be used to subdivide the lowest level under a Plant where MRP will apply.

DOTD will utilize MRP Areas by assigned Storage Locations at the parish level.

One or more MRP Controllers can be designated for an inventory site, each being responsible for the replenishment planning of different materials.

One MRP Controller will be assigned to each MRP Area.

MRP Types include manual or automatic reorder points that are determined with or without external requirements.

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Material Master Data Material Master Data –– MRP SpecificMRP Specific Key DecisionsKey Decisions

Applicable MRP Types have been determined.

Applicable Lot-sizing selections have been determined.

Material Master MRP and Forecasting control data is owned and maintained at the inventory site by the Inventory Manager.

The forecast functionality will be available at Plant and MRP Area level.

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Material Master Data Material Master Data –– MRP SpecificMRP Specific Creating / Adjusting MRP Master DataCreating / Adjusting MRP Master Data

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Material Master Data Material Master Data –– MRP SpecificMRP Specific Changes & ChallengesChanges & Challenges

CHANGE: Inventory personnel to be responsible for inventory specific Material Master information.

– Organizational impacts:• Inventory Manager to maintain information specific to their

Plant/Storage Location.

– Policy impacts:• Policy and procedures will need to be established for completion

of information specific to a Plant and/or Storage Location.

– Training requirements:• Training of personnel to maintain information on the Inventory/

MRP/Forecast related views of the Material Master Record.

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Change: Establishment of MRP Areas.

– Organizational impacts:• Establishing at least one MRP controller per MRP Area.

– Policy impacts:• Policy and procedures need to be developed for maintenance

of inventory within an MRP Area. For example:• Min/max• Reorder points• Safety stock

– Training requirements:• Train the MRP Controller.

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Challenge: Identification of materials that require MRP and Forecasting functionality.

– Training requirements:• Training of personnel to properly identify materials

that require MRP functionality and appropriate forecasting parameters.

1/21/2009 43

Material Master Data Material Master Data –– MRP SpecificMRP Specific Resolved IssuesResolved Issues

Look at use of vendor consignment (special procurement keys) relating to fuel.– Vendor consignment fuel is not part of Inventory Management.

Determine locations where MRP applies. – All inventory areas maintaining min/max will need MRP functionality.

Determine use of MRP Areas and/or Storage Location MRPs. – MRP Areas have been defined.

Gather information regarding which Plants will be the supplying Plants for a particular material.– DOTD districts will supply items to parishes.– DOTD Central Warehouse will supply items to districts.

1/21/2009 44


Look into MRP generated Stock Transfers being 2 step (issue/receipt).– Stock Transport Orders will be utilized for moves from:

• Central Warehouse to district• Central Warehouse to parish• district to district• district to parish outside of plant

– Stock Transfers will be used for local moves within the same stock location, such as a district moving an item from inside storage to stock yard.

Integrate with Purchasing to include the MRP Controller as an approver to MRP generated Stock Transport requisitions and requisitions for external procurement.– Release of the requisition by the MRP Controller serves as the

approval by the MRP Controller.

1/21/2009 45


Possible numbering schemes for MRP generated requisitions – if different approvals are needed than for regular requisitions, MRP requisitions could have a different number range to trigger a separate strategy.

– By default the system sets a flag in the requisition indicating whether it was MRP generated or manually generated. Approvals can be based on this flag.

1/21/2009 46

Material Master Data Material Master Data –– MRP SpecificMRP Specific Tasks to be Completed Tasks to be Completed

Define MRP Types per material.

Define Lot-sizing procedures per material.

Define any Special Procurement Types.

Define Lead Time Elements for materials.

Assign MRP Controllers.

Determine use of statistical forecasting.

Conversion requirements and logic.

1/21/2009 47

Material Master Data Material Master Data –– MRP SpecificMRP Specific Benefits & Improvements Benefits & Improvements

Allows for more efficient management of inventories located within a Plant or several Plants.

Increased visibility of inventoried items.

Increased ability to plan and forecast needs.

Statistical consumption data is available from one system.

Replaces manual entry of requisitions, which speeds up the replenishment process.

1/21/2009 48

Material Master Data Material Master Data –– MRP SpecificMRP Specific FRICEFRICE--W Objects W Objects

Forms:– In-house form for changes pertaining to MRP specific

master data

Reports:– Replenishment report

Conversions:– Additional required information needed for Material Master:

• MRP Types• Lot–sizing Procedures• Special Procurement Types• Lead Time Elements

1/21/2009 49

Master DataMaster Data

Warehouse ManagementSpecific

Master Data

1/21/2009 50

Master Data Master Data –– WM SpecificWM Specific

Warehouse specific Material Master data will be used to manage complex warehouse structures.

Warehouse Management (WM) is an extension of Inventory Management.

WM Material Master views will be extended by the centralized work group to Storage Locations that will utilize WM functionality.


Warehouse Management 1Warehouse Management 2

1/21/2009 51


WM does not have financial implications.

WM specific information will be modified by warehouse staff, usually the Warehouse Manager.

Bin master data will be created and maintained by the Warehouse Manager.

1/21/2009 52


WM specific material master data includes general material data, storage strategies, palletization data, and storage bin material quantities data (min, max, replenishment quantity, etc.).

Storage bin master data includes storage section, storage bin type, picking area, max bin weight, bin capacity (if relevant) and bin blocking indicators.

Storage bins are maintained per warehouse and storage type.

1/21/2009 53

Master Data Master Data –– WM SpecificWM Specific Key Decisions Key Decisions

Identified current warehouse(s) / yards(s) that will utilize WM.– Only two warehouse locations have been identified:

DOTD Central WarehouseDPS Central Warehouse

What numbering scheme will be used for warehouses?– Since only two warehouses have been identified, the warehouse

number will be designed and created by the centralized work group.

– Numbering of warehouse location inventories must be a unique identifiable number. For reporting purposes, warehouse location numbering can not be duplicated across plants within the state.

1/21/2009 54

Master Data Master Data –– WM SpecificWM Specific Flow Chart Flow Chart -- Extend WM ViewsExtend WM Views

1/21/2009 55

Master Data Master Data –– WM SpecificWM Specific Flow Chart Flow Chart -- Storage Bin Creation/MaintenanceStorage Bin Creation/Maintenance

1/21/2009 56

Material Master Data Material Master Data –– WM SpecificWM Specific Changes & ChallengesChanges & Challenges

CHANGE: Inventory personnel to be responsible for the maintenance of WM specific Material Master information.

– Organizational impacts:• Warehouse Manager to maintain information specific to

their warehouse.

– Policy impacts:• Policy and procedures will need to be established for

completion of information specific to a warehouse location.

– Training requirements:• Training of personnel to maintain information on the WM

related views of the Material Master Record.

1/21/2009 57

Master Data Master Data –– WM SpecificWM Specific Tasks to be CompletedTasks to be Completed

Identify warehouse layout

pick zone/fixed bin/packing area, etc.

Define storage types

bulk, fixed, etc.

Define storage sections (optional)

fast, medium, slow, etc.

Define bin attributes

size, weight capacity, etc.

Define bin numbering scheme

For example: Aisle/Shelf-Bin = A52-01

1/21/2009 58

Master Data Master Data –– WM SpecificWM Specific Benefits & Improvements Benefits & Improvements

More accurate visibility of items located in multiple locations within the warehouse.

Can define fixed bin locations, pick strategy, putaway strategies.

Can specify WM unit of measure, which is different than the basic unit of measure. This allows movement of materials within the warehouse based on the larger unit of measure.

Automatic bin replenishment can be triggered based on min/max quantity maintained in WM views.

Can maintain palletization information, i.e. how many WM units make a full pallet. Avoids the need of conversion every time the material is moved.

1/21/2009 59

Master Data Master Data –– WM SpecificWM Specific FRICEFRICE--W ObjectsW Objects

Forms: – In-house form for changes pertaining to WM specific master data.

Reports– Material Master listing with bin locations, min/max, quantity, etc.

Conversions:– Additional required information needed for Material Master:

Storage TypesStorage SectionsStorage Bin TypesMinimum Bin WeightsMaximum Bin WeightsBin Capacities (if relevant)

1/21/2009 60

Inventory and Warehouse ManagementInventory and Warehouse Management

Requests forInventory Items

1/21/2009 61

IM & WM IM & WM –– Requests for Inventory ItemsRequests for Inventory Items GAPSGAPS

Discuss with Procurement where the interface will be for the requisition/reservation process for inventoried items.

– Currently evaluating three options.

1/21/2009 62

IM & WM IM & WM –– Requests for Inventory ItemsRequests for Inventory Items Open IssuesOpen Issues

Discuss with Procurement how an inventory item with split valuation (new and refurbished) will be handled on a requisition. If the refurbished item is requested but not available, approval is needed to issue the new item at the higher price.

Can SRM/ECC allow the ATP (available to promise) check to be performed before the approvals?

ATP check is currently only at Plant level through SRM. Needs to be at Storage Location level.

1/21/2009 63

IM & WM IM & WM –– Requests for Inventory ItemsRequests for Inventory Items FRICEFRICE--WW

Reports

– Report that can be generated by plant, storage location or warehouse that will list inventory items with on hand quantities.

1/21/2009 64

Inventory and Warehouse ManagementInventory and Warehouse Management Goods MovementsGoods Movements

Transfers

1/21/2009 65

IM & WM IM & WM –– TransfersTransfers

Stock Transfer– Used for internal physical movement of a material where the account

assignment does not change (i.e. Storage Location to Storage Location, bin to bin).

– Inventories will decrease at the source location and increase at the destination location.

– Financial implications do not occur with this transaction.

Stock Transport– Used for physical movement of a material where the ownership changes from

the source location to the destination location (i.e. from Plant to Plant; district to district).

– Inventories will decrease at the source location and increase at the destination location with this transaction.

– Financial implications will occur with this transaction.

Transfer Posting– Used for the logical movement of a material from one category to another

within the same location (i.e. from ‘blocked stock’ to ‘unrestricted use’). – Financial implications do not occur with this transaction.

1/21/2009 66

IM & WM IM & WM –– TransfersTransfers

Internal Physical Transfers:

– Can be accomplished via the 1-Step method or the 2-Step method.

• 1-Step method: Step 1 - issue the item to the final destination.

• 2-Step method: Step 1 - issue the item to an interim location.Step 2 – issue the item from the interim location to

the final destination.

1/21/2009 67

IM TransfersIM Transfers Storage Location to Storage Location Storage Location to Storage Location –– 1 Step1 Step

Send

ing

Stor

age

Loca

tion

Rec

eivi

ng S

tora

ge

Loca

tion

1/21/2009 68

IM TransfersIM Transfers Storage Location to Storage Location Storage Location to Storage Location –– 2 Step2 Step

1/21/2009 69

WM TransfersWM Transfers Bin to BinBin to Bin

1/21/2009 70

WM TransfersWM Transfers Stock Replenishment at Bin LevelStock Replenishment at Bin Level

1/21/2009 71

WM TransfersWM Transfers Stock Replenishment at Bin LevelStock Replenishment at Bin Level

1/21/2009 72

IM & WM TransfersIM & WM Transfers Open IssuesOpen Issues

How will SAP handle production orders and/or sales orders currently utilized by DOTD (inter-agency transfers)?

Review delivered reports regarding transfers.

1/21/2009 73

IM & WM TransfersIM & WM Transfers FRICEFRICE--W Objects W Objects

Forms:

– Development of an internal transfer document for internal movements and/or transfer postings

– Development of a packing list for stock transport orders

Enhancements:

– Ability to initiate bin to bin transfers using RF device

Workflow:

– Approvals needed for Stock Transport Orders

1/21/2009 74

Inventory and Warehouse ManagementInventory and Warehouse Management Goods MovementsGoods Movements

Goods Receipts

1/21/2009 75

IM & WM Goods ReceiptsIM & WM Goods Receipts

A Goods Receipt (GR) transaction will be entered for all items received into inventory. Inventory will be increased by the GR quantity upon completion of this transaction.

A GR transaction will also be entered for all non-inventoried items received at an inventory location through a purchase order. This will allow tracing capability of these items.

A GR transaction is the only transaction needed if an inventoried item is received into an IM only facility.

If an inventoried item is received into a WM facility, further movement transactions will be needed to place the items into a bin location within the warehouse.

1/21/2009 76

IM & WM Goods ReceiptsIM & WM Goods Receipts

Items that require quality inspection before acceptance and placement into inventory can be placed in either:

– GR blocked status - valuation does not occur until the items are approved and moved to unrestricted use status.

-or-– Quality Inspection (QI) status - valuation does occur

when items are placed into QI status.

WM inbound transactions can be completed with RF devices and barcode enabled functionalities.

Inbound Deliveries will be utilized for items returned to WM warehouses.

1/21/2009 77

IM & WM Goods ReceiptsIM & WM Goods Receipts Key DecisionsKey Decisions

Automatic R-Mail notification to the purchasing office is not required for goods received.

Non-valuated Material Type will be used for items that are expensed at purchase, but still need to be managed on a quantity basis in Inventory Management.

Split valuation will be used to enable different inventory cost prices for new and used/overhauled components. Valuation type will have to be entered for all goods movements of materials subject to split valuation.

1/21/2009 78

IM & WM Goods ReceiptsIM & WM Goods Receipts Key DecisionsKey Decisions

IM - Shelf Life Expiration Date information will be utilized through Batch Management. The vendor batch number and shelf life expiration date will have to be entered at the time of the GR transaction.

WM – Shelf Life Expiration Date can be drilled down to the quant level.

Serialization will be used to keep track of serialized materials. Serial numbers will have to be manually entered each time this item is relocated (example: LED traffic lights).

1/21/2009 79

IM Goods ReceiptsIM Goods Receipts GR for PO ItemGR for PO Item

1/21/2009 80

Warehouse ManagementWarehouse Management Receiving Process for PO and STOReceiving Process for PO and STO

1/21/2009 81

Warehouse ManagementWarehouse Management Goods Receipts Goods Receipts –– PutawayPutaway

1/21/2009 82

IM & WM IM & WM –– Goods ReceiptsGoods Receipts Changes & ChallengesChanges & Challenges

CHALLENGE: If the account assignment field is left blank on the purchase requisition/purchase order and the item has a Material Master Record, then the item is received as an inventory item.

– Organizational impacts:• Item would have to be received into inventory via a Goods

Receipt and then issued to the requestor via a Good Issue.

– Training requirements:• Strong emphasis should be placed on the importance of correct

entries to the account assignment field of purchase requisitions/ purchase orders.

– Option:• Authorization for ordering inventoried items may only be given to

inventory personnel through user profiles.

1/21/2009 83

IM & WM IM & WM –– Goods ReceiptsGoods Receipts Resolved IssuesResolved Issues

Look into necessity of printing a GR slip with every GR transactions vs. using the online system.– Utilization of online system with ability to print GR information as needed– Development of a GR slip

How to handle zero dollar amount items in inventory (bank bags, DOTD produced forms, DOTD sheeting)?– Will be handled as non-valuated materials

Discuss under and over delivery tolerances with Finance and Procurement. IM/WM group not in favor of under delivery tolerances due to the encumbrance funds issue, but do need to look closer at overages.– No under delivery tolerances will be allowed

Discuss with Purchasing requisitions to blanket orders, scheduling agreements, etc.– A similar functionality for blanket orders will be utilized in SAP.

1/21/2009 84

IM & WM IM & WM –– Goods ReceiptsGoods Receipts Open IssuesOpen Issues

Forced in receipts on POs that are marked ‘delivery complete’ (encumbrance cancelled when delivery marked complete before all items are received). To be discussed with Procurement.

Discuss with PM work orders with byproducts (i.e. poles/J bolts)

Mobile solutions to map serial numbers to GRs.

1/21/2009 85

IM & WM IM & WM –– Goods ReceiptsGoods Receipts Tasks to be CompletedTasks to be Completed

Discuss with Finance the determination of valuation classes between IM and Financial Accounting.

1/21/2009 86

IM & WM IM & WM –– Goods ReceiptsGoods Receipts FRICEFRICE--W ObjectsW Objects

Forms:– Barcoded inbound worksheet for RF device use in

receiving items into the warehouse– Standardize GR form needs to be developed

Reports:– Development of customized reports regarding GRs

Enhancements:– RF transactions for receiving/putaway

1/21/2009 87

Inventory and Warehouse ManagementInventory and Warehouse Management Goods IssuesGoods Issues

Goods Issues

1/21/2009 88

IM & WM Goods IssuesIM & WM Goods Issues

A Goods Issue (GI) is initiated by either a Reservation, Stock Transport Order, Outbound Delivery or verbal request (walkup customer).

Stock Transport Orders will be used to move inventory items from one Plant to another Plant location.– Example: DOTD District 1 to DOTD District 2

A GI transaction will be initiated for all items issued from inventory.

A GI transaction will decrease the quantity of the inventoried item.

A GI transaction is the only transaction needed if an inventoried item is issued from an IM only facility.

1/21/2009 89

IM & WM Goods IssuesIM & WM Goods Issues

If an inventoried item is issued from a WM facility, further movement transactions will be needed to pick the items from a bin location within the warehouse.

WM outbound transactions can be completed with RF devices and barcode enabled functionalities.

Picking strategies can be applied, but are optional.

1/21/2009 90

IM & WM Goods IssuesIM & WM Goods Issues Key DecisionsKey Decisions

DOTD work-orders may require, for a short period of time, a negative stock quantity and stock value for certain Storage Locations and material combinations where mobilized GIs will occur before the GR transactions.

– Example: hot-mix

Batch Status Management will be used to enable blocking of specific batches for GI.– Example: Items with expired expiration dates

1/21/2009 91

IM & WM Goods IssuesIM & WM Goods Issues Key DecisionsKey Decisions

WM - Outbound Deliveries will be used when delivering items issued out of inventory.

WM - The Outbound Deliveries will be initiated based on reservations entered by the requestors.

Approvals/Account assignments for unplanned issues will be obtained verbally.

1/21/2009 92

IM Goods IssuesIM Goods Issues GI for Cost Center GI for Cost Center –– Planned PickupPlanned Pickup

B.08-LOG-IM-PDD002-General Inventory Processing/GI for Cost Center - Planned Pick-up

Req

uest

orW

areh

ouse

Create reservationStart

Full/partial GI for account

assignment with reference to reservation

Inventory available? Yes

MRP repenishment

processing

No

GR for PO

EndMaterial supply required

Procurement Sourcing

1/21/2009 93

IM Goods IssuesIM Goods Issues GI for Cost Center GI for Cost Center –– Unplanned PickupUnplanned Pickup

1/21/2009 94

IM Goods IssuesIM Goods Issues GI GI –– Stock TransportStock Transport

1/21/2009 95

WM Goods IssuesWM Goods Issues GI GI –– Stock Transport with WMStock Transport with WM

1/21/2009 96

IM Goods IssuesIM Goods Issues Return to VendorReturn to Vendor

1/21/2009 97

IM Goods IssuesIM Goods Issues GI for ScrapGI for Scrap

1/21/2009 98

WM Goods IssuesWM Goods Issues WM Picking ProcessWM Picking Process

1/21/2009 99

WM Goods IssuesWM Goods Issues Delivery Out of InventoryDelivery Out of Inventory

1/21/2009 100

IM & WM Goods IssuesIM & WM Goods Issues Changes & ChallengesChanges & Challenges

Challenge: Approvals/account assignments for unplanned issues will be obtained verbally. Approvals will be entered in the text field of the material document.

– Organizational impacts:• Employees must be knowledgeable of account

assignments (i.e. work order number, cost center, project number).

– Training requirements:• Inventory staff must have knowledge of appropriate

approver(s) per agency.

1/21/2009 101

IM & WM Goods IssuesIM & WM Goods Issues Resolved IssuesResolved Issues

SME’s to provide samples of issuing documents.– Samples provided by DOTD and DPS.

Resolve issue of items loaned to non-agency entities or contractors that are not returned.– Proposed solution is that non agency entities and contractors will

be billed for the items. Items will no longer be loaned.

Need approval process for unplanned issues.– Approvals for unplanned issues will be obtained verbally and will

be entered in the text field of the material document.

Discuss with Linear Assets how the concrete and hot mix inventories will be handled in SAP.– Concrete/hot mix will be handled in Inventory Management and

may result in a temporary negative stock.

1/21/2009 102

IM & WM Goods IssuesIM & WM Goods Issues Open IssuesOpen Issues

Discuss with Agile Assets and/or Plant Maintenance if linear assets such as LEDs (for traffic lights) and cameras will be issued as a consumable item or considered an asset.

Review fuel requirements for DOTD Alexandria area (bulk fuel vs. statewide fuel contract); price changes weekly. To be discussed with Fleet Maintenance.

Discuss with Plant Maintenance/Project approval of work orders/projects and the associated Goods Issues.

1/21/2009 103

IM & WM Goods IssuesIM & WM Goods Issues Open IssuesOpen Issues

Talk to Human Resources (HR) to see if items issued can be tracked to the person it was issued to through an HR line (i.e. State Police uniforms)

– HR consultant to advise. Object can be linked to assets, but not sure if object can be linked to inventory/warehouse.

Review delivered Goods Issue reports.

1/21/2009 104

IM & WM Goods IssuesIM & WM Goods Issues GAPSGAPS

Discuss with Procurement the Stock Transport process.

– Determine approach to handling Stock Transport approvals.

• SRM does not recognize Stock Transport Requisitions.

• Approvals are required in DOTD and potentially other departments as well.

1/21/2009 105

IM & WM Goods IssuesIM & WM Goods Issues FRICEFRICE--W ObjectsW Objects

Forms:

– Development of pick list, issue ticket, and packing slip to include barcoded information.

Enhancements:

– Transformation of Reservations into Outbound Deliveries for triggering of WM picking for reservations. Reservations will need to be deleted after transformation.

– Development of custom tables for status management and mapping of cost centers to ship to addresses in regards to transformation of Reservations into Outbound Deliveries.

– RF transactions for WM picking process.

Workflow:

– Approvals for Goods Issues based on Reservations as well as walk up customers.

1/21/2009 106

IM & WM Goods Movements IM & WM Goods Movements –– GeneralGeneral

GOODS MOVEMENTSGENERAL INFORMATION

1/21/2009 107

IM & WM Goods Movements IM & WM Goods Movements –– GeneralGeneral Open IssuesOpen Issues

Discuss with Agile Assets about inventories with serial numbers that need to track warranty issue.

Discuss with PM items going from field back to inventory, sent for repair, and back into inventory after repaired (LEDs). Need to track by serial numbers and have split valuation.

1/21/2009 108

IM & WM Goods Movements IM & WM Goods Movements –– GeneralGeneral Benefits & ImprovementsBenefits & Improvements

Inventory Management will be integrated with the SAP Financial module, Plant Maintenance module, and Project Systems module.

Eliminates dual system entries

Document flow of goods movements will provide full traceability of items received which may include relevant information such as:

Reservation/Purchase OrderAccount AssignmentVendor/Supplying PlantDate of GRDate of GI

1/21/2009 109

IM & WM Goods Movements IM & WM Goods Movements –– GeneralGeneral Benefits & ImprovementsBenefits & Improvements

Visibility of statewide inventories allows for improved distribution of inventoried items.

All transactions are completed online, reducing manual paperwork currently used for goods movements.

Use of RF devices in WM will reduce paperwork and time required to complete goods movement transactions.

Use of RF devices in WM will reduce clerical data entry errors.

1/21/2009 110

Materials Requirement PlanningMaterials Requirement Planning

MRP Run

1/21/2009 111

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run

The MRP process is an online system process used for the replenishment of inventoried materials.

MRP looks at Inventory Management, not Warehouse Management.

MRP looks at the current stock requirements situation and creates MRP Lists containing replenishment proposals.

The replenishment proposals are reviewed and approved by the MRP Controller.

1/21/2009 112

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run Key DecisionsKey Decisions

Currently Consumption Driven MRP applies across reviewed agencies.

MRP Areas will be utilized to subdivide Plants into local replenishment units.

MRP output will be:

– Planned Orders for external procurements and stock transports between Plants.

– As an exception, replenishments within the same plant can only be Stock Transport Requisitions. For example:

• District to Parish• DPS Central Warehouse to Data Inventory

1/21/2009 113

Materials Requirement PlanningMaterials Requirement Planning MRP RunMRP Run

1/21/2009 114

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run Changes & ChallengesChanges & Challenges

Challenge: Training of MRP Controller

– Training requirements:

• MRP Controller training to involve both system training and forecasting analysis training.

1/21/2009 115

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run Resolved IssuesResolved Issues

Discuss with Procurement what is the option for synchronization of price.

– Requisition costs will be imported from the Material Master Record.

1/21/2009 116

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run Open IssuesOpen Issues

Review of MRP specific reports available in SAP system to determine if needs are met.

1/21/2009 117

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run GAPSGAPS

Discuss with Procurement the requisition process.

– Determine approach to handling MRP generated requisition approvals.

1/21/2009 118

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run Benefits & ImprovementsBenefits & Improvements

Automated system assists day to day planning of materials.

Real time check on statewide inventory items.

Forecasting capabilities can automate the determination of the safety stock and reorder point.

Efficient management of inventory levels results in lower costs and higher service standards.

1/21/2009 119

Materials Requirement Planning Materials Requirement Planning –– MRP RunMRP Run FRICEFRICE--W ObjectsW Objects

Reports:– Need report listing purchase requisitions/purchase orders by

Storage Location.

Conversions:– Current Material Master MRP data

Workflow:– Approval process for Stock Transport Requisitions

1/21/2009 120

Warehouse ManagementWarehouse Management

WM Planning and Monitoring

1/21/2009 121

WM Planning and MonitoringWM Planning and Monitoring

The WM planning and monitoring process will use three tools to monitor the warehouse:

• Warehouse Activity Monitor• RF Monitor• Delivery Monitor

The Warehouse Activity Monitor allows warehouse administrators the ability to oversee, plan, and optimize work processes in the warehouse.

The RF Monitor allows warehouse administrators the ability to oversee and plan warehouse activities, i.e. assign or reassign workloads through a queue.

The Delivery Monitor indicates both Inbound and Outbound Deliveries and the status of these deliveries.

1/21/2009 122

WM Planning and MonitoringWM Planning and Monitoring Changes & ChallengesChanges & Challenges

Change: Utilization of RF devices allows for material movement requests to be continuously assigned or reassigned to warehouse personnel.

– Organization impacts:• Establish infrastructure for RF devices

resulting in purchase of RF guns, barcode printers, etc.

– Training requirements:• Employee training of RF devices.

1/21/2009 123

WM Planning and MonitoringWM Planning and Monitoring Resolved IssuesResolved Issues

Discuss with Procurement how the monitoring of past due PO items will be handled.

– Report to be provided showing all open PO items.

Determination of warehouse activities to be executed through RF devices.

– The majority of warehouse activities can be handled through RF devices.

1/21/2009 124

WM Planning and MonitoringWM Planning and Monitoring Tasks to be CompletedTasks to be Completed

Agencies to provide listing of putaway and pick strategies. For example:

– Based on min/max quantities– Maintenance of Shelf Life / Expiration dates– FIFO – LIFO

1/21/2009 125

WM Planning and MonitoringWM Planning and Monitoring Open IssuesOpen Issues

Discuss with Finance and Procurement the inventory integration of P-Card Goods Receipts (GR for inventory procured without reference).– Procurement currently evaluating two possible processes.

What are the requirements to support the RF device infrastructure?

1/21/2009 126

WM Planning and MonitoringWM Planning and Monitoring Benefits & ImprovementsBenefits & Improvements

Automated monitoring of Warehouse Management processes.

Automated recognition and display of errors provides increased efficiency in monitoring of personnel tasks.

RF device allows for reassignment of workloads based on real time queue reports generated.

1/21/2009 127

Inventory and Warehouse ManagementInventory and Warehouse Management

Stock Taking

1/21/2009 128

IM Stock TakingIM Stock Taking

IM Stock Taking Processes:

– Periodic Physical Inventory• A count of all inventory items located within a Storage

Location performed on a periodic basis. Usually performed annually.

• Requires shut down of all inventory operations until counts have been completed and differences reconciled.

– Continuous Physical Inventory• Stocks are counted continuously during the entire fiscal

year.

• Important to ensure that every material is physically counted at least once during the year.

1/21/2009 129


– Cycle Counting

• A count of all inventory items at regular intervals within a fiscal year.

• The cycle counting indicator determines the intervals of the cycle count.

– Inventory Sampling

• Random selected stocks to be physically counted on a specific date.

• If the variance between the count and the book inventory balances are within a certain range, it is presumed that the book inventory balances are correct for all other items.

1/21/2009 130


IM inventory count is carried out at the Material/Storage Location level.

Freezing book inventory balances allows you to take a snapshot of the system inventory levels when the count took place. This enables you to lift the block indicator when the count has been taken and allows business to continue while reconciling and posting of inventory differences is being completed.

1/21/2009 131

WM Stock TakingWM Stock Taking

WM Stock Taking:

– Annual

• A count of all inventory items located within a Plant/Warehouse performed on an annual basis.

• Requires shut down of all inventory operations until counts have been completed and differences reconciled.

– Random

• Unscheduled stock counts performed on an as needed basis throughout the year.

• Can be a single bin, multiple bins, or all bins.

– Periodic

• Performed on a continuous basis.

• Cycle counting is determined by A, B, C scheme.

1/21/2009 132

WM Stock TakingWM Stock Taking

WM inventory count is carried out at the bin level.

WM Continuous Inventory may be completed at the time of an inventory putaway.

WM allows for zero stock check during stock removals.

WM stock taking processes may be completed with the RF device.

1/21/2009 133

IM & WM Stock TakingIM & WM Stock Taking

Any variations of the different stock taking processes can be utilized within a Storage Location.

Selections for physical inventory counting documents can be by Storage Locations, Material Type, Material Group or Bin Number.

Physical inventory documents can be created and printed prior to the actual blocking of materials for inventory count.

1/21/2009 134

IM & WM Stock TakingIM & WM Stock Taking

IM and WM inventory must always match.

– Any differences between WM and IM inventory counts will post to “Interim Storage Area for Differences”.

– Differences will have to be reviewed to determine if they are valid.

• If not valid, a recount for that material may be needed.

• If valid, you will clear the differences, which will automatically update IM inventory to match WM.

1/21/2009 135

IM & WM Stock TakingIM & WM Stock Taking Key DecisionsKey Decisions

Periodic Physical Inventory (wall-to-wall) will be used by all agencies at least once per year.

Continuous Physical Inventory will be available and optional for any agency that wants to spread a physical inventory across the year.

Cycle Counting will be available and optional for any agency that wants to count fast moving items more frequently than slow moving items.

1/21/2009 136

IM Stock TakingIM Stock Taking Cycle CountingCycle Counting

1/21/2009 137

IM & WM Stock TakingIM & WM Stock Taking Changes & ChallengesChanges & Challenges

Challenge: Goods Issues are blocked when materials are blocked for inventory taking.

– Policy impacts:

• Procedures need to be established for planned work orders requiring issuance of inventory items during inventory stock taking.

1/21/2009 138

IM & WM Stock TakingIM & WM Stock Taking Changes & ChallengesChanges & Challenges

Change: RF devices will be used for WM stock taking process.

– Organizational impacts:

• The establishment of RF device infrastructure including purchase of RF devices, barcode printers, etc.

– Training Requirements:

• Train personnel on use of RF device.

1/21/2009 139

IM & WM Stock TakingIM & WM Stock Taking Resolved IssuesResolved Issues

Look into RF gun process for inventory taking.

– RF devices will be used for WM stock taking only.

Need reason code or comment field for discrepancies in inventory.

– Reason codes are available in SAP.

1/21/2009 140

IM & WM Stock TakingIM & WM Stock Taking Open Issues Open Issues

Discuss with PM – blocked Goods Issues when materials are block for inventory (what are the organizational impacts?).

Check to see if annual inventory is required by law or if continuous inventory can be used.

Define reason codes applicable to LaGov for stock taking discrepancies.

1/21/2009 141

IM & WM Stock TakingIM & WM Stock Taking Benefits & ImprovementsBenefits & Improvements

Better control over stock adjustment via document posting/ audit trail.

Stock visibility at the bin level.

Reduced time required to take WM annual inventory count using the RF device.

Added system functionality for physical inventory and stock adjustment in warehouse.

1/21/2009 142

IM & WM Stock TakingIM & WM Stock Taking FRICEFRICE--W ObjectsW Objects

Reports:

– Inventory Counting Sheet that does not show system inventory quantities

– Inventory Counting Sheet that does show system inventory quantities

Enhancements:

– RF transaction capabilities for WM inventory taking processing

1/21/2009 143

Organizational Impact SummaryOrganizational Impact Summary

Establishment of Controlled Work Group as owners/maintainers of Material Master Records who will also be responsible for the extension of the IM & WM views to the appropriate Plants and Storage Locations.

Establishment of at least one MRP Controller per MRP Area – DOTD districts/parishes may have one person responsible for all

inventory items at one location.

Establishment of RF device infrastructure resulting in the purchase of RF guns, barcode printers, etc.

Training of personnel – to maintain information on the Material Master view related to Inventory

Management, Warehouse Management, MRP functionality and appropriate forecasting parameters.

– on inventory functions related to MRP Area and MRP Controller duties– on use of RF devices for WM functions

1/21/2009 144

Next Steps Next Steps -- GeneralGeneral

Current Blueprinting Phase (Nov ’08 – Jan ’09):

– Conducting Validation Session

– Researching and Resolving Open Issues

Realization Phase (February 2009+):

– System Configuration

– Unit and Confirmation Testing

– Document Business Process Procedures (BPP’s)

– Define and Develop FRICE objects

– Integration Testing

– User Acceptance Testing

1/21/2009 145

Next Steps Next Steps –– IM & WM SpecificIM & WM Specific

Review and Finalize Process Design Documents (PDDs)– documents detailing the to be processes

Review Legacy Conversion Data

1/21/2009 146

Questions?Questions?